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Tuesday, 10 January 2017

(The Star) Poh Kong targeting faster revenue growth

KUALA LUMPUR: Jewellery maker Poh Kong Holdings Bhd is targeting faster revenue growth this year on stronger demand for gold bullion.
The company is also seeing brisk sales online.
“We are anticipating a higher growth in revenue for financial year 2017 (FY17) based on our extrapolation of Poh Kong’s sales which grew by 7.6% to RM185mil in the first quarter of financial year 2017 (Q1’17),” said its corporate affairs, administration and human resources head Margaret Hon, after the company’s annual general meeting yesterday.
Margaret said that several financial measures have been undertaken to streamline Poh Kong’s business operations such as by consolidating non-performing stores and establishing more outlets in high growth potential areas.
This year, Poh Kong is planning to open up to a total of five jewellery stores, in addition to its existing 102 outlets nationwide under various brands.
The company is also seeking to increase its online sales due to increasing popularity from customers. Currently, jewelleries from Poh Kong can be bought online through websites such as Lazada and 11Street.
“Online sales for Poh Kong have been picking up. However, it could not be compared to outlet sales as the contribution is still small,” said Poh Kong marketing manager Elizabeth Choon.
Based on calculations by analysts, Poh Kong controlled a market share of approximately 16-20%, in the domestic jewellery market estimated to be worth RM5bil.
Poh Kong posted a net profit of RM11mil in FY16 which ended July 31, albeit being 24% lower than FY15 net profit of RM14.5mil. As for Q1’17, its net profit rose by more than five-fold to RM1.8mil, compared to RM336,000 in the corresponding preceding period. The weakening ringgit, which has resulted in retail gold prices in Malaysia being relatively higher in contrast to international prices, appeared to be beneficial for the jeweller as more customers were purchasing gold for investment, to hedge the risk of ringgit depreciation.

To note, about 15% of Poh Kong’s revenue were contributed by bullion sales for investment purposes.